BUYER MISLED ABOUT ZONING AND PERMITTED USE OBTAINS RECOVERY

Sean Bryn represented a buyer who was misled about the zoning and allowable uses of a commercial property that Client purchased with the intention to use as owner-occupier for its automotive repair and restoration business.  The Seller and Selling Broker’s representation regarding the property’s zoning in marketing materials, purchase agreement and disclosures was incorrect. Moreover, Client’s real estate broker failed to properly confirm the actual zoning of the property and informed our client that the zoning represented was accurate, the client could use the property for its intended use, and Client did not need to retain an attorney to assist in due diligence including review of the title report, which again, Client’s broker negligently reviewed. Client completed its purchase and later discovered that it could not use the property for its intended use and obtaining a Commercial Use Permit from the City of Los Angeles to allow the intended use was an expensive, lengthy and uncertain process.  Therefore, Client chose to “cut its losses” and sell the property at a substantial loss.

Client filed a lawsuit against the Seller, Seller’s real estate broker and Client’s real estate broker. Our firm was able to negotiate a $745,000 settlement for the Client.  Client subsequently purchased a different property and retained our firm to assist in due diligence review to confirm that Client would be able use that property as an owner-occupier consistent with Client’s business operations.  Due diligence review of disclosures, public records and title reports should always be done by competent counsel and not a real estate broker.